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The Paradox

There is a paradox here. Senior managers know that they must grow revenues and profits. They recognize that low revenue and profit growth could mean the loss of their own jobs. Mid-level managers are hesitant to propose new investment opportunities, and finance departments are applying greater levels of rigor to every corporate funding proposal. The exception is when senior management wants specific investments to be made. In these instances, no matter what the financial analysis shows, managers go along for political reasons and survival. Apart from these "pet" investments, it seems increasingly difficult to get resources for new investments that could result in greater revenue growth, efficiencies, and higher profits. A common maxim, "Nothing ventured, nothing gained," describes the situation well; in this case, very little is being ventured, so it should not be surprising when little is gained.

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